Current spending trends help us answer, "are we in a downturn?"

Update since Friday: Happy 4th of July! Nothing to report over the long weekend, except apparently the state of California will give us more money, to combat inflation’s impact on our budgets. Hopefully we don’t use the stimulus checks to spend more and further lift prices! I would feel really bad if I heard that someone’s rent was hiked because of this “inflation relief payment”, scheduled to start going out in October of this year.

I’m happy to report that Opportunity Insight’s Economic Tracker is releasing data again! After a long dry spell, it seems we are now back to getting the weekly updates on consumer spending that were a big part of my analysis of current conditions for a while. These data show, real time, how spending is evolving in San Bernardino County, and are therefore crucial for asking “how are things right now?” at the local level.

That’s particularly important these days because there is some discussion of a possible recession. I’ve mentioned the anecdotal evidence of this before, but the chart above gives us a better picture. While this chart shows spending relative to January 2020, you can track the line – if it’s falling, that means consumer spending is falling. Right now spending in San Bernardino County is staying level or slightly rising. That’s a good sign for the recessionary outlook.

The other statistic that I track for current economic updates is new unemployment insurance claims, through California’s EDD. Also released at the county level, these give us a sense of the labor market – if the numbers rise, that’s bad since more people are filing for unemployment benefits; if the numbers fall, that’s a good thing. Lately, they’ve stayed constant (I don’t have a chart, but feel free to contact me about it if you’re interested). The latest data, for the week ending June 24, shows that the current 4-week average is 2,931 claims, down from 3,008 claims in the previous week’s 4-week average. So there hasn’t been much of a change here, and if anything, there has been some slight improvement.